News Corp and Carlos Slim looking at F1 takeover

It is being reported that the News Corporation, owned by Rupert Murdoch, and Carlos Slim, currently the richest man in the world, are looking into a joint bid for the ownership of Formula 1.

The global media group – which already owns the rights to many other sports, such as live Premier League football matches – has begun preliminary talks with Slim with forming a consortium to make a bid for F1.

If this deal went ahead, it would be a huge blow for the BBC, as F1 is the only sport in the UK where they own sole broadcasting rights.

At the moment, Formula 1 is owned by private equity group CVC Capital Partners. If News Corp took over, there are fears that the current advertising-free coverage (on the BBC at least) will be replaced by a pay-per-view system, most likely on Sky Sports – which News Corp is also trying to take over.

CVC, who paid $2.5 bn for F1 back in 2005, have currently declined to comment. An official statement from News Corp has described the reports as “rumour and speculation”. However, a source from inside the company has stated:

"News Corp going into this transaction now is premature. They are thinking about F1
and options they could take but that is all it is at this stage.
They [News Corp] will do nothing until after the next Concorde meeting (most likely
start of 2012 - it expires at the end of that year) – there is no way to possibly value or plan until after that."

There are several obstacles in the way of a possible takeover. Both the FIA and Bernie Ecclestone are believed to have veto rights on any new owners. Also, car manufacturers in F1 would be unhappy with moving to pay-per-view broadcasting, as it reaches a smaller audience.

Until these reports develop, CVC are suffering problems of their own. The company is facing scrutiny regarding bribes to former bankers who oversaw the sale of F1 to CVC in 2005. Bernie Ecclestone has been questioned by German authorities, however it has been clarified that he is not the subject of investigation.